Salesforce has projected lacklustre quarterly sales growth, stoking fears on Wall Street that the software giant is losing ground to emerging artificial intelligence companies. The company anticipates revenue of $US10.2 billion to $10.3 billion for the period ending in October, slightly below the average analyst estimate of $10.3 billion. Current remaining performance obligations, a measure of bookings, are expected to increase slightly above 10 per cent, aligning with average analyst projections. Salesforce provides customer relationship management software and cloud-based services to businesses. The platform helps companies manage sales, marketing, and customer service operations.
Investors are increasingly concerned that established software makers may be overshadowed by new AI-based vendors. Companies like Salesforce, which operate on a per-user charging model, have faced considerable scepticism. The concern stems from the expectation that AI could automate some of the tasks currently handled by their software, potentially reducing their customers’ workforce and, consequently, revenue.
Following the announcement, Salesforce shares experienced a decline of approximately 5 per cent in extended trading, after closing at $256.45 in New York. Year-to-date, through Wednesday’s close, the stock has fallen 23 per cent. According to Keith Weiss, an analyst at Morgan Stanley, this decline reflects the growing narrative of AI disruption within the software industry, which he noted in a report released prior to the earnings announcement.
